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INTERNATIONAL UNION OF BRICKLAYERS v. HUDSON VALLE

August 1, 1994

INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTSMEN LOCAL NO. 5, EMIL A. PARIETTI, JR. and PHILIP MOSCA, as Trustees of the Hudson Valley District Council Bricklayers and Allied Craftsmen Joint Benefit Funds, Plaintiffs,
v.
HUDSON VALLEY DISTRICT COUNCIL BRICKLAYERS AND ALLIED CRAFTSMEN JOINT BENEFIT FUNDS, ANDREW GALLANTE, SR., MICHAEL CAVALLARO, SALVATORE MAURO and RODERICK CIFERRI III, Defendants.



The opinion of the court was delivered by: VINCENT L. BRODERICK

 VINCENT L. BRODERICK, U.S.D.J.

 I

 This litigation concerns the extent to which international trade unions having authority over locals under the applicable union constitutions may determine the identity of union representatives on joint employer-union employee benefit funds under the Labor-Management Relations Act of 1947 ("Taft-Hartley Act"), 29 USC 185, 186 and ERISA, 29 USC 1001 et seq.

 The current dispute arises out of a conflict concerning the conditions under which the designee of the International Union of Bricklayers and Allied Craftsmen ("International Union,") can displace previously appointed union-appointed trustees of employee benefit (ERISA) funds within territory covered by a newly created Local which replaces locals formerly part of the Hudson Valley District Council of the union.

 By memorandum order dated June 21, 1994 (the "June 21 order"), which is made a part of this memorandum order and familiarity with which is assumed, it was determined that the President of Local 5 of the International Union has the authority under the rulings of the International Union to determine the union trustees on all ERISA employee benefit funds in the area formerly covered by the Hudson Valley District Council of the International Union. Those findings are reaffirmed. The June 21 order and this order constitute findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52 and 65.

 In the June 21 order, defendants were given the opportunity to show cause why an injunction should not be entered requiring compliance with these findings. Objections were filed, asserting that this court lacked jurisdiction to issue such an order. Those objections lack merit.

 II

 Under Section 301 of the Labor-Management Relations Act of 1947 ("Taft-Hartley Act"), 29 USC 185, United States district courts have jurisdiction to enforce agreements between labor organizations. This permits the court to direct representatives acting for subordinate entities of an International Union to obey its mandates where not illegal or inapplicable. This federal district court jurisdiction includes permitting proper authorities in an international union structure to determine the identity of labor trustees under ERISA plans. Levy v. Local Union Number 810, 20 F.3d 516 (1994); see also IBT v. Local 810, 19 F.3d 786, 790 (2d Cir 1994). *fn1"

 While acting as fiduciaries for the funds required to be used on behalf of the beneficiaries of the funds, such persons also act as representatives of the applicable collective bargaining agents or employers as the case may be. Their independence extends to exercising their own judgment consistent with their obligations as fiduciaries while in office but not to remaining in office contrary to the wishes of the unions or employers they represent. ERISA trustees do not have the authority to perpetuate themselves in office by self-serving resolutions amending the plans to keep them in control of large sums of money which can be administered as a separate power source without regard to the wishes of their principals. See Levy, 20 F.2d at 520.

 The principle set forth in Levy does not place structures for selection of ERISA trustees in a straitjacket. It does not bar four year terms or arrangements dispersing employee trustee representation among various union entities from being adopted, so long as self-entrenchment is prevented by such provisions as that an employee trustee "must . . . be replaced if he ceases to be . . . designated representative of one of the participating locals." IBT v. Health & Hospital Fund, 903 F.2d 919, 921 (2d Cir 1990). Such a safeguard if present here would compel the result reached in this memorandum order. An arrangement which would "operate to entrench the employee trustees" is prohibited by our national labor laws. Id at 923.

 Jurisdiction to enforce these principles exists under both 29 USC 185 and ERISA, 29 USC 1132. Levy at 519 n 7.

 Any resolutions, amendments or other documents purporting to extend the terms of ERISA plan trustees, whose removal is sought by the unions or employers who selected them are void. Moreover, newly selected and former trustees of any funds affiliated with the Hudson Valley District Council of the International Union are duty bound pursuant to their fiduciary obligations to review and if appropriate to challenge any other contracts or acts voted for by removed trustees which have any arguably self-serving aspects, such as ...


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